For the first time, ESB has voluntarily aligned its annual Sustainability Report for 2025 to the Corporate Sustainability Reporting Directive (CSRD) – new European legislation that puts sustainability reporting on the same footing as financial reporting, raising the bar on transparency. A key change is how we report on our value chain.
Under CSRD, organisations must take a broader view of the value chain to include not only their own operations but what happens up- and downstream of the business itself. This article takes a closer look at the concept of the value chain and what this new approach means for reporting on sustainability at ESB.
What is the value chain?
For a business, the value chain comprises all the steps that go into creating a product or service and getting it to the final customer. It begins with the ‘upstream’ inputs and activities: everything that happens prior to the organisation's own operations, including sourcing raw materials and manufacturing inputs, and working with suppliers. Next are the company’s own operations: all actions related to producing the product or delivering the service. And finally, the value chain covers ‘downstream’ activities that happen after the company has provided its product or service; these include aspects related to distribution, use of the product, and how it is disposed of.
What elements make up ESB’s value chain?
At the outset of our 2025 Sustainability Report, we outline what the value chain looks like for ESB. The illustration below provides an at-a-glance overview of the various elements involved, described in more detail below.
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(Note: for an accessible version of this visual please see the relevant section of the 2025 Sustainability Report.)
- Upstream: supply chain and resources
Our business relies on a range of natural resources – such as sun, wind, water and natural gas – to generate and supply energy. These resources, along with key materials such as cement, steel and other construction and operational inputs, are extracted, processed and transported through our supplier network before being used to build and operate energy infrastructure. Over the lifecycle of our assets, materials and components ultimately reach end-of-life, where they may be reused, refurbished, recycled or disposed of. We seek to take a circular economy approach wherever feasible, prioritising reuse and recovery to reduce environmental impacts. - Own operations: business operations
Within our direct operations, our generation business continues to build new renewable generation while maintaining gas-powered capacity to support system security. We also develop supporting technologies – including battery storage and synchronous compensators – that enable a stable, flexible and renewable-ready power system. Our networks businesses ESB Networks and NIE Networks play a central role in enabling the transition to a clean electric future by developing a net-zero-ready electricity network by 2040. This includes connecting new renewable generation and supporting adoption of solar PV, electric vehicles, electric heating and demand-side flexibility solutions. - Downstream: energy supply, products and services
Turning to what happens downstream of our own operations: we supply electricity and gas to over two million customers and support them to reduce emissions through energy-efficiency initiatives, electrification solutions and programmes to encourage behavioural change. At ESB, our ability to create value depends on our employees and wider stakeholder ecosystem, including customers and communities, investors, governments, regulators, and suppliers. Our strategy recognises that achieving net zero by 2040 must be done in a way that is sustainable and socially responsible. Our stakeholder groups influence and are affected by our transition to a net-zero electricity system. ESB's Sustainability Leadership Plan sets out priorities across Planet, Place and People, guiding actions to protect ecosystems, support communities and ensure a fair, inclusive transition across the value chain.
Why is it important to understand the value chain for sustainability?
By requiring companies to take this broad view of their value chains when reporting on sustainability, CSRD ensures they look beyond their own operations and give the full picture of their impact on the environment and society. And by taking into account upstream elements like the supply chain and downstream considerations like how electricity is used, we can also better identify where the most significant risks exist and act to mitigate them. Overall, it helps us to be more transparent and complete when sharing our sustainability progress with our stakeholders and the wider world.